[blackcat] L2 Leading KDJ Candle Indicator

28 Sep 2020

Level: 2

Background
The KDJ oscillator display consists of 3 lines (K, D and J - hence the name of the display) and 2 levels. K and D are the same lines you see when using the stochastic oscillator. The J line in turn represents the deviation of the D value from the K value. The convergence of these lines indicates new trading opportunities. Just like the Stochastic Oscillator, oversold and overbought levels correspond to the times when the trend is likely to reverse.

Function

[blackcat] L2 Leading KDJ Candle Indicator use candles to indicate KD relationship. E.g. yellow candles for bull (K>=D) and fuchsia candles for bear (K<D). On the other hand, to promote the response, there is a new leading line added into KDJ indicator with color change as yellow for K>=D and fuchsia for K<D.

Key Signal

k --> KDJ K value
d --> KDJ D value
buysig --> KD buy signal in green triangle
selsig --> KD sell signal in red triangle
leadingline --> colorful leading line for KDJ



Pros and Cons

Pros:

1. Candle height can indicates the strength of trend and different colors are used for indicating KD relationship
2. a leading line is added as aux method to confirm KDJ signal


Cons:

1. It may satruate for extreme conditions of long and short as described in the chart, which is inherent KDJ shortcoming.
2. Not accurate for long and short entries and need filtering out noise and fake signal.


Remarks

More direct to observe and confirm trend with the leading line.

Readme

In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.

The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.

Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.

Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.

Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.

Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.

Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.

30 Sep 2020

Nota Keluaran

In order to obey the House Rule, remove the irrelevant MA Cross display.

30 Sep 2020

Nota Keluaran

In order to obey the House Rule, remove the irrelevant MA Cross display.

24 Mac

Nota Keluaran

OVERVIEW

This script provides the **L2 Leading KDJ Candle Indicator**, analyzing market momentum through modified KDJ oscillators and a dynamic leading line. It generates visual signals for entry/exit opportunities with configurable thresholds and color-coded candle patterns.

FEATURES

Modified KDJ Oscillator: Calculates K (relative strength) and D values using smoothed averages for reduced noise.
Buy/Sell Signals:
Buy: When D < 20 AND K crosses above D.
Sell: When D > 80 AND D crosses below K.
Threshold Lines: Predefined levels at 80%, 20%, 90%, and 10% with fill areas highlighting extremes.
Dynamic Leading Line: Combines price deviations (13-period, 26-period, 90-period SMAs) into a weighted equilibrium metric.
Visual Aesthetics:
Color-coded K-D relationships: yellow for rising momentum, fuchsia for falling momentum.
Overlaid candle-style plotting of K and D values.

HOW TO USE


Adjust the [Lookback Period] input (default 30 periods) to refine short-term volatility detection.
Monitor K-D crossovers relative to the 20% and 80% thresholds for trade triggers.
Observe the Leading Line Value (plotted in thick yellow/fuchsia curves) to gauge medium-term trend direction.

LIMITATIONS

Relies heavily on historical highs/lows; extreme volatility may distort readings.
Fixed 3-period smoothing reduces responsiveness to abrupt changes.
Crosses near thresholds may cause frequent false signals during sideways markets.

NOTES

The script uses non-standard deviation formulas:
price_deviation_26 references a 21-period SMA (likely intentional).
Combined Deviation scales short-, mid-, and long-term deviations to isolate core momentum shifts.
Overlay disabled by default (overlay=false) ensures standalone chart placement.